Under former section 3-307, the presumption of the genuineness of a signature under this section has application only to negotiable instruments, and a guaranty is not such an instrument. Aetna Cas. & Surety Co. v. Nielsen, 217 Neb. 297, 348 N.W.2d 851 (1984).
Under former section 3-307, when the signatures on an instrument are admitted, the production of the instrument entitles the holder to recover on it unless the defendant establishes a defense, and to do so such a defense must be affirmatively pleaded, although it is only necessary to plead the facts and not the theory of the defense. Blaha GMC-Jeep, Inc. v. Frerichs, 211 Neb. 103, 317 N.W.2d 894 (1982).
Under former section 3-307, unless specifically denied in the pleadings, signatures on a promissory note are admitted and upon production of the note the holder is entitled to recover unless the defendant establishes a defense. Center Bank v. Mid-Continent Meats, Inc., 194 Neb. 665, 234 N.W.2d 902 (1975).
Under former section 3-307, when signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense. Adair v. Adair, 192 Neb. 571, 222 N.W.2d 908 (1974).
A signature on a promissory note is presumed genuine unless specifically denied in the pleadings. The holder of a signed promissory note is entitled to recover upon production of the note unless the defendant establishes a defense. If the maker of the promissory note shows that a defense exists, then the claimant on the note has the burden of proving his status as a holder in due course. Lewis v. Opstein, 1 Neb. App. 698, 510 N.W.2d 382 (1993).
1. Section 3-308 is a modification of former section 3-307. The first two sentences of subsection (a) are a restatement of former section 3-307(1). The purpose of the requirement of a specific denial in the pleadings is to give the plaintiff notice of the defendant's claim of forgery or lack of authority as to the particular signature, and to afford the plaintiff an opportunity to investigate and obtain evidence. If local rules of pleading permit, the denial may be on information and belief, or it may be a denial of knowledge or information sufficient to form a belief. It need not be under oath unless the local statutes or rules require verification. In the absence of such specific denial the signature stands admitted, and is not in issue. Nothing in this section is intended, however, to prevent amendment of the pleading in a proper case.
The question of the burden of establishing the signature arises only when it has been put in issue by specific denial. "Burden of establishing" is defined in section 1-201. The burden is on the party claiming under the signature, but the signature is presumed to be authentic and authorized except as stated in the second sentence of subsection (a). "Presumed" is defined in section 1-201 and means that until some evidence is introduced which would support a finding that the signature is forged or unauthorized, the plaintiff is not required to prove that it is valid. The presumption rests upon the fact that in ordinary experience forged or unauthorized signatures are very uncommon, and normally any evidence is within the control of, or more accessible to, the defendant. The defendant is therefor required to make some sufficient showing of the grounds for the denial before the plaintiff is required to introduce evidence. The defendant's evidence need not be sufficient to require a directed verdict, but it must be enough to support the denial by permitting a finding in the defendant's favor. Until introduction of such evidence the presumption requires a finding for the plaintiff. Once such evidence is introduced the burden of establishing the signature by a preponderance of the total evidence is on the plaintiff. The presumption does not arise if the action is to enforce the obligation of a purported signer who has died or become incompetent before the evidence is required, and so is disabled from obtaining or introducing it. "Action" is defined in section 1-201 and includes a claim asserted against the estate of a deceased or an incompetent.
The last sentence of subsection (a) is a new provision that is necessary to take into account section 3-402(a) that allows an undisclosed principal to be liable on an instrument signed by an authorized representative. In that case the person enforcing the instrument must prove that the undisclosed principal is liable.
2. Subsection (b) restates former section 3-307(2) and (3). Once signatures are proved or admitted a holder, by mere production of the instrument, proves "entitlement to enforce the instrument" because under section 3-301 a holder is a person entitled to enforce the instrument. Any other person in possession of an instrument may recover only if that person has the rights of a holder. Section 3-301. That person must prove a transfer giving that person such rights under section 3-203(b) or that such rights were obtained by subrogation or succession.
If a plaintiff producing the instrument proves entitlement to enforce the instrument, either as a holder or a person with rights of a holder, the plaintiff is entitled to recovery unless the defendant proves a defense or claim in recoupment. Until proof of a defense or claim in recoupment is made, the issue as to whether the plaintiff has rights of a holder in due course does not arise. In the absence of a defense or claim in recoupment, any person entitled to enforce the instrument is entitled to recover. If a defense or claim in recoupment is proved, the plaintiff may seek to cut off the defense or claim in recoupment by proving that the plaintiff is a holder in due course or that the plaintiff has rights of a holder in due course under section 3-203(b) or by subrogation or succession. All elements of section 3-302(a) must be proved.
Nothing in this section is intended to say that the plaintiff must necessarily prove rights as a holder in due course. The plaintiff may elect to introduce no further evidence, in which case a verdict may be directed for the plaintiff or the defendant, or the issue of the defense or claim in recoupment may be left to the trier of fact, according to the weight and sufficiency of the defendant's evidence. The plaintiff may elect to rebut the defense or claim in recoupment by proof to the contrary, in which case a verdict may be directed for either party or the issue may be for the trier of fact. Subsection (b) means only that if the plaintiff claims the rights of a holder in due course against the defense or claim in recoupment, the plaintiff has the burden of proof on that issue.